An Urgent Crisis, An Effective, Affordable Remedy

Political Process, Tainted Numbers

Almost immediately after the state Supreme Court unanimously approved the ballot language for the class-size initiative, Gov. Bush hastily amended his call for a special legislative session to include a new proposal—requiring all citizen-initiated constitutional amendments to be accompanied on the ballot by a cost estimate explained in up to 50 words.94 (Amendments offered by the Legislature were exempted from this requirement.) The Revenue Estimating Conference (REC), a panel that provides economic forecasting and analysis to state government, was assigned the job of calculating the cost estimate and coming up with the explanatory language that would appear on the election ballot alongside each amendment. The REC is composed of representatives from the governor’s office, the Senate, and the House, along with an economist from the Legislature’s independent Office of Economic and Demographic Research (EDR).95

At the REC hearing in June, the representatives from the governor’s office, Senate and House came up with a $20-$27.5 billion price tag96 for the initiative using a cumulative cost formula that they do not normally use to calculate the cost of other programs—including tax cuts, school vouchers or other legislation that has a major long-term impact on the availability of funding for public schools. This method was not applied to any other initiative. It seems to have been devised to put the largest possible price tag on the class size initiative. (The legal status of the requirement to have the price tag on the initiative has not been resolved in the courts; a judge ruled against the requirement and the state has appealed.)97

A St. Petersburg Times article noted that the price tag “relies on budget assumptions rarely if ever used in state government.” The article noted “If standard budget practices had been followed, the estimate calculated by state budget analysts would be cut by more than half.”98

The class size price tag does not express future costs in 2002 numbers, which would help voters put the figure in the context of the current budget. This is how the REC analyzes the cost of legislation and its impact on the state’s budget. Yet in the case of the class size initiative, instead of expressing figures in current numbers, they adjusted every year for inflation and then added all the years together. At the REC hearing, Edward Montanaro, the widely respected economist who then headed the independent EDR, said the approach being used created a “meaningless stew” and that it “fundamentally misrepresents the situation” to voters.99

“When opponents want to kill a project, they maximize the cost,” Iowa State University Professor Kurt Thurmaier told the St. Petersburg Times. “This sounds like a way to maximize the cost.”100

Consider this analogy. People who are trying to buy houses in the same neighborhood compare the advertised selling prices. But imagine that one homeowner would be singled out and required to advertise his house at a cost that included all the future payments a buyer would make on a 30-year mortgage. That one house would appear vastly more expensive than the others. It would be unfair both to the seller and to people trying to accurately compare house prices.

Some opponents of the initiative have confused the situation even further by comparing the inflated 8-year cost of the initiative to the current, one-year budget for education in the state.

Indeed, the REC’s method led to an estimate that is much higher than other estimates of class-size reduction. Last October, long after organizers of the class-size initiative announced their plans, state Education Secretary Jim Horne had cited an estimate of $10 billion.101 This April, the head of the Florida School Boards Association estimated the cost at $5-6 billion.102

Montanaro had released his range of cost estimates for the class size initiative well before the REC’s June 27 meeting, as the Tallahassee Democrat explained, “to get feedback from supporters and opponents.”103 The initiative, which would be phased in over eight years, was projected by Montanaro to cost between $4 and $12 billion over that eight-year period.104 Other members of the REC did not invite advance scrutiny.

Under the REC’s normal operating procedures, all four REC principals must arrive at a consensus in order to have an “official revenue forecast.” If they cannot reach consensus, there is no official forecast.105 The law that gave the REC the responsibility for estimating the price tag for initiatives, however, changed the normal consensus rules and allowed the estimate to become official with three out of four votes. Montanaro, who voted against the $20 to $27.5 billion estimate, has impeccable credentials. One Florida newspaper recently described Montanaro, who directed EDR for 16 years, as “the Legislature’s recognized financial expert.”106 After Montanaro announced in late July that he would be leaving EDR, House Speaker Tom Feeney, R-Oviedo, described him as having “a reputation of being a distinguished and principled state employee who is very conscientious and does his job without being bullied.”107 And Florida Senate President John McKay, R-Bradenton, said that Montanaro “performed a good service for the Legislature and the state.”108